NeuLion Reports Record Fourth Quarter and Year-End Financial Results

Record Breaking Revenue, Non-GAAP Adjusted EBITDA and Net Income

PLAINVIEW, NY--(Marketwired - Mar 13, 2014) - NeuLion, Inc. (TSX: NLN), a leading enabler and provider of live and on-demand content to Internet-connected devices, today announced record financial results for both the three months and year ended December 31, 2013 (all amounts are in U.S. dollars).

NeuLion posted its best-ever quarterly revenue of $14.1 million -- an increase of 34% over the previous year period. This boosted NeuLion's 2013 revenue to $47.1 million -- an increase of 21% over the previous year. Quarterly Non-GAAP Adjusted EBITDA was $2.2 million -- an improvement of $1.4 million over the previous year period. Annual Non-GAAP Adjusted EBITDA was $3.5 million -- an improvement of $6.8 million over the previous year. Quarterly Consolidated Net Income was $1.1 million -- an improvement of $1.9 million over the previous year period. Annual Consolidated Net Loss was $2.3 million -- an improvement of $7.8 million over the previous year.

"We are extremely pleased with the improvements in both our fourth quarter and year-end financial results," said Nancy Li, Chief Executive Officer of the Company. "Our financial success directly correlates to our ability to capitalize on the worldwide adoption of digital media as the means for consuming content. This is underscored by the fact that live video delivered by NeuLion increased by 88% to 154 petabytes in 2013. We expect to see continued growth in the breadth and scope of digital media adoption over the next year and beyond."

Fourth Quarter Operational Highlights:

Professional SportsInteractive video experience delivering live and on-demand video

Extended multi-year partnership with the Big 12 Conference to host and deliver big12sports.com as well as mobile applications, live streaming of events and affiliate video portals throughout the conferences' footprints.

College subscription business substantially increased from the prior year and added adaptive streaming capabilities for over 15 colleges and universities on PCs, smartphones and tablets.

Grew mobile traffic by 43% across the NeuLion college network year-over-year.

TV EverywhereMulti-device content delivery

Launched new multi-screen apps for Sport TV, Portugal's number one sports network, which enables subscribers of the network access to a multitude of live HD content on multiple devices.

Signed agreements with Shaw Communications and Bell Canada to create iOS and Android applications authenticated for Shaw Cable and Bell Canada subscribers.

Expanded the use of the NeuLion Platform to deliver high-quality, interactive live and on-demand high school sports games through MSG Varsity online.

Financial Results for the Three Months Ended December 31, 2013:

Revenue was $14.1 million, as compared to $10.5 million for the three months ended December 31, 2012, an increase of $3.6 million, or 34%.

Non-GAAP Adjusted Gross Margin % was 72%, as compared to 69% for the three months ended December 31, 2012, marking a period-over-period improvement of 3%.

Consolidated operating income was $1.1 million, as compared to a consolidated operating loss of $0.4 million for the three months ended December 31, 2012, an improvement of $1.5 million.

Consolidated net income was $1.1 million, which includes $1.1 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $2.2 million, as compared to a consolidated net loss of $(0.8) million, which includes $1.6 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $0.8 million for the three months ended December 31, 2012, marking a period-over-period improvement in Non-GAAP Adjusted EBITDA of $1.4 million, or 175%.

Financial Results for the Year Ended December 31, 2013:

Revenue was $47.1 million, as compared to $39.0 million for the year ended December 31, 2012, an increase of $8.1 million, or 21%.

Non-GAAP Adjusted Gross Margin % was 72%, as compared to 65% for the year ended December 31, 2012, marking a period-over-period improvement of 7%.

Consolidated operating loss was $1.6 million, as compared to $9.3 million for the year ended December 31, 2012, an improvement of $7.7 million.

Consolidated net loss was $2.3 million, which includes $5.8 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $3.5 million, as compared to a consolidated net loss of $10.1 million, which includes $6.8 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $(3.3) million for the year ended December 31, 2012, marking a year-over-year improvement in Non-GAAP Adjusted EBITDA of $6.8 million.

NeuLion Financial Highlights

Three months ended December 31, 2013 vs December 31, 2012

Q4 2013
(million)

Q4 2012
(million)

$ change
(million)

%
change

Total Revenue

$14.1

$10.5

$3.6

34%

Professional Sports (1)

$6.8

$3.9

$2.9

74%

College Sports (1)

$3.8

$3.1

$0.7

23%

TV Everywhere (1)

$3.0

$2.9

$0.1

3%

Non-GAAP Adjusted Gross Margin % (defined below)

72%

69%

--

--

Consolidated Operating Income (Loss)

$1.1

$(0.4)

$1.5

--

Non-GAAP Adjusted EBITDA (defined below)

$2.2

$0.8

$1.4

175%

Consolidated Net Income (Loss)

$1.1

$(0.8)

$1.9

--

Year ended December 31, 2013 vs December 31, 2012

2013 YE
(million)

2012 YE
(million)

$ change (million)

%
change

Total Revenue

$47.1

$39.0

$8.1

21%

Professional Sports (1)

$20.9

$13.5

$7.4

55%

College Sports (1)

$12.6

$10.9

$1.7

16%

TV Everywhere (1)

$11.3

$10.6

$0.7

7%

Non-GAAP Adjusted Gross Margin % (defined below)

72%

65%

--

--

Consolidated Operating Income (Loss)

$(1.6)

$(9.3)

$7.7

--

Non-GAAP Adjusted EBITDA (defined below)

$3.5

$(3.3)

$6.8

--

Consolidated Net Income (Loss)

$(2.3)

$(10.1)

$7.8

--

(1) Excludes equipment revenue

Use of Non-GAAP Measures

Non-GAAP Adjusted Gross Margin %

We report non-GAAP Adjusted Gross Margin % because it is a key measure used by management to evaluate our results and make strategic decisions about the Company, including potential acquisitions. Non-GAAP Adjusted Gross Margin % represents consolidated operating income (loss) plus depreciation and amortization, research and development expenses and selling general administrative expenses divided by total revenue. This measure does not have any standardized meaning prescribed by U.S. GAAP and therefore is unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with U.S. GAAP.

Selling, general and administrative, including stock-based compensation

6,300,462

5,244,689

24,289,845

23,541,296

Non-GAAP Adjusted Gross Margin

10,148,299

7,317,571

33,828,115

25,288,508

Non-GAAP Adjusted Gross Margin % (as a % of total revenue)

72%

69%

72%

65%

Non-GAAP Adjusted EBITDA

We report Non-GAAP Adjusted EBITDA because it is a key measure used by management to evaluate our results and make strategic decisions about our Company, including potential acquisitions. Non-GAAP Adjusted EBITDA represents consolidated net income (loss) before interest, income taxes, depreciation and amortization, stock-based compensation, discount on convertible note and foreign exchange loss. This measure does not have any standardized meaning prescribed by U.S. generally accepted accounting principles (U.S. GAAP) and therefore is unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with U.S. GAAP.

The below table reconciles our Non-GAAP Adjusted EBITDA to its most directly comparable U.S. GAAP measure, consolidated net income (loss):

Three months ended

Year ended

December 31,

December 31,

2013

2012

2013

2012

Consolidated net income (loss) on a GAAP basis

1,071,979

(862,040

)

(2,278,345

)

(10,078,764

)

Depreciation and amortization

767,782

842,614

3,755,054

4,407,474

Stock-based compensation

344,291

361,497

1,416,892

1,627,231

Discount on convertible note

--

77,922

233,769

77,922

Deferred income taxes

11,556

333,884

276,846

612,884

Interest and foreign exchange loss

33,844

16,992

128,144

54,918

Non-GAAP Adjusted EBITDA

2,229,452

770,869

3,532,360

(3,298,335

)

About NeuLionNeuLion, Inc. (TSX: NLN) offers the true end-to-end solution for delivering live and on-demand content to Internet-enabled devices. NeuLion enables content owners and distributors, cable operators and telecommunications companies to capitalize on the massive consumer demand for viewing video content on PCs, smartphones, iPads and other similar devices. NeuLion's customers include major entertainment, sports, global content and news companies. NeuLion is based in Plainview, NY. For more information about NeuLion, visit www.neulion.com.

Forward-Looking StatementsCertain statements herein are forward-looking statements and represent NeuLion's current intentions in respect of future activities. Forward-looking statements can be identified by the use of the words "will," "expect," "seek," "anticipate," "believe," "plan," "estimate," "expect," and "intend" and statements that an event or result "may," "will," "can,""should," "could," or "might" occur or be achieved and other similar expressions. These statements, in addressing future events and conditions, involve inherent risks and uncertainties. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this release are based upon what management believes to be reasonable assumptions, NeuLion cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and NeuLion assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause NeuLion's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: our ability to realize some or all of the anticipated benefits of our partnerships; general economic and market segment conditions; our customers' subscriber levels and financial health; our ability to pursue and consummate acquisitions in a timely manner; our continued relationships with our customers; our ability to negotiate favorable terms for contract renewals; competitor activity; product capability and acceptance rates; technology changes; regulatory changes; foreign exchange risk; interest rate risk; and credit risk. A more detailed assessment of the risks that could cause actual results to materially differ from current expectations is contained in the "Risk Factors" section of NeuLion's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which is available on www.sec.gov and filed on www.sedar.com.